$Suntec Reit(T82U.SG)
Context:
In an update on its strategic review, Suntec Reit has announced it plans to focus on growing its Singapore assets and sell off 3 properties in Australia. This will bring the reit’s gearing below 40% and reduce earnings drag caused by the high interest rate in Australia. Given the capital market in Australia is improving, it will hopefully be easy to find buyers for the Australia assets. On the daily chart, Suntec Reit has hit the lower limit of the Bollinger Band, if this cannot hold, further downside is likely in the short term.
My Trade: Wait for good price to accumulate.
Takeaway: The outcome of Suntec Reit’s strategic review is to improve the gearing ratio by selling off 3 properties in Australia and concentrate on the more stable Singapore market which sounds to me like a good strategy for the long term. Hopefully the execution will be smooth.
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